Removing a collection account is considered FRAUD.... :p

[Amerikaner83]

Hey all -

Got a nice letter in the mail today - a repsonse from a PFD agreement I sent out on Monday. It's Friday...yeah. Quick reply!

Goes something like this:

Dear Amerikaner83,

I received a letter from you today. Unfortunately, I am unable to negociate a settlement offer. We do not purchase our debts, and the full amount is due and oweing to clear our records. Also, removing a collection account from your record, would be considered fraud on our part, and we can have no part in that. If you would like to take care of the accounts listed with us, please pay them in full, and we will gladly report the accounts as paid in full. 1-800-626-0617

Sincerely, "account rep"

Acct:

Acct:

LOL Is that not the STUPIDEST thing you've ever heard?

So I should mention that I typed EXACTLY how the letter was written to me, spelling and grammer errros and all, except it was in ALL CAPS.

SO....below is my reply letter. Just a draft, the first things that came out of my head.....

The accounts are bad checks written in 2002 (still within SOL)

My reply letter:

First of all, I’d like to thank you for your swift reply to my initial settlement offer. Unfortunately, there seems to be some problems that are standing in the way of a mutually beneficial solution, and I’d like to clear them up with you.

You stated that “removing a collection account from your record, would be considered fraud on our part, and we can have no part in that.” That’s not true. The FCRA (Fair Credit Reporting Act) does not require anything to be reported to the credit bureaus; in fact, the FCRA only states that IF something is reported, it has to be accurate. That is a common misconception, and I hold no fault against your company for that. Companies add and remove accounts from credit reports every day, and it is not fraud. Fraud is when a credit report contains inaccurate data.

However, you are a collection agency. You’re in the business of collecting money. I’m a consumer, and my main concern is a clear credit report. I think that we can both benefit from a payment arrangement, and I’m sure you want to see payment as quickly as possible.

Unfortunately, I have no reason to pay this debt if I do not receive a clear credit report as a result. You see, if I pay you, and you update to “paid collection”, the FICO scoring system counts that as recent negative mark, and my score tanks. That’s not acceptable to me. There are ways to work around this that will benefit both of us: I pay you the face value of the accounts (minus interest and “collection fees” – we both know they’re bordering on the Usury) and you delete the item form my credit report. Or, if you refuse to delete the item, we can do this: I’ll dispute the item, and you simply don’t have to respond. After the 30 days, I will send you a certified check for the amount we agree upon at that time.

Do get back to me, I’d like to have this matter resolved amicably.

So...what is the CIC wisdom at this point? LOL I'm still laughing about the FRAUD part!

[Amerikaner83]

I should also add that there is only ONE account reporting, but TWO in the CA's office. So they were 1 for 2 in responding within the 30 days . Also - this account is only on TU, nowhere else.

original amounts totalled are 85 bucks...they want 257 after interest and fees

[merkurfan]

Tell um you'll give them 130 dollars for payment in full with a signed PFD agreement, or try to slip in a non-disclosure-agreement and see if they bite on that. If they do, and you pay them they are bound not to disclose the settlement, IE they can't update their tradeline. (or verify it!).. There are a couple of NDA's floating around here as samples. Make sure you put in the aggrement some amount of money owed you if they violate the NDA. IE you put in they owe you 500 dollars if they make a disclosure, they then verify the TL.. Boom, you made 500 dollars, now sue them for breach of contract. Settle for a delete and expenses.

I learned that trick from Divemedic.

[Amerikaner83]

Nice angle...didn't even think about NDA

[isislc]

I like it! Go get em!

[Flyingifr]

My take?

Since fraud is either civilly or criminally actionable, and they assert that agreeing to a PFD is fraud, I would demand, in an ITS letter, they they cite the criminal or civil cause of action anyone would have against them for this crime or tort of fraud. If they can't or don't they have violated FDCPA with a misleading and false statement, which IS actionable.

[merkurfan]

Flying has a darn good point. They ARE trying to misslead you. Because there is no federal or state law that says a PFD is fraud. It might be a breach of contract between the CA and the CRA, but a better repsonse to you would have been. Sorry, we don't do pfd's.

[Amerikaner83]

Hmm...I just may incorporate that into my letter...

[hiblues]

You said the CA is reporting on your CR's

but

Are you asking the CA to delete the OC TL?

The letter they sent you said they are assigned the debt, implying that they have no control over the TL...

very misleading.

Are you going to send an ITS?

[Amerikaner83]

Its for a bad check - so there is no OC.

They ARE reporting on TU - they have 2 checks in their system, only 1 is reporting (they didn't respond within 30 days when I disputed awhile ago on one).

About sending the ITS - I'm going to sit down here in the next few days and iron one out. I'll post what I've got here and welcome final responses...probabloy send it off this weekend.

[retmar]

My pennies worth.

You are correct as to deleting not fraud. As to your letter, I suggest the following.

1. Delete the sentence about you hold no fault on them. What you do say is you are aware they have misrepresented the statute by claiming fraud, that the only reason they do not delete is due to their attitude of wanting to harm the consumer in all ways possible (or whatever you want to say here). And, due to their claim, you are now filing a complaint with your AG, their AG, the FTC, and all ofther governing agencies, and, will discuss with your attorney the possibility of naming them in a civil suit in the district court of your county.

2. Though we all agree the fees, based on what you show, are near usury, I would advise you locate your state laws regarding returned checks. Then, if you can prove illegal fees, nail them on it. What many people do not realize is that each state has their own statute governing this. Example, in California, to be able to collect triple, a certain set of incidents must occur, which include the mailing of letters, wait, etc. Yes, the CA can note that they may collect "up to" as a "scare", but, be sure it is legal. Certegy, who collects on bad checks is famous for intimidation and may try to overcharge. They will call you as many times a day they can until you give them a payment over the phone. Even if you tell them you have already sent payment, they do not care, and continue. Send it CMRR and give them the numbers makes no difference.

3. Delete the last two paragraphs. They are unecessary and serve no purpose. They know all of that already.

Your goal here is to assure them you will not sit back and be taken advantage of, and, will fight for all you have for resolving this amicably. You can reword some of the content you retain. Just remember you want the ball in your court, not theirs. Thus, you need to attack them with their misrepresenting the statutes, as well as addressing the fees, if found illegal. And, lastly, any other "error" they may have made. Do not be poilte. Be stern, precise, and professional. Thanking them for a quick response is OK, but, they could care less. All they want is for you to pay.

[Amerikaner83]

Retmar - I really want to take the time to read and reply to your post, but right now I'm just online to post two letters I've drafted at work today. I do plan on replying in more detail when I get home.

EDITED to remove length, as i don't need these letters anymore

I drafted those two at work today...

I'm off to go back home. I'll give Retmar's post the attention it deserves when I get home. Be back soon y'all

A-83

[Amerikaner83]

1. Delete the sentence about you hold no fault on them. What you do say is you are aware they have misrepresented the statute by claiming fraud, that the only reason they do not delete is due to their attitude of wanting to harm the consumer in all ways possible (or whatever you want to say here). And, due to their claim, you are now filing a complaint with your AG, their AG, the FTC, and all ofther governing agencies, and, will discuss with your attorney the possibility of naming them in a civil suit in the district court of your county.

OK I will do this. We have the same AG, they're not an out of state CA. They're Armada Corporation, have to do some digging on them.

2. Though we all agree the fees, based on what you show, are near usury, I would advise you locate your state laws regarding returned checks. Then, if you can prove illegal fees, nail them on it. What many people do not realize is that each state has their own statute governing this. Example, in California, to be able to collect triple, a certain set of incidents must occur, which include the mailing of letters, wait, etc. Yes, the CA can note that they may collect "up to" as a "scare", but, be sure it is legal. Certegy, who collects on bad checks is famous for intimidation and may try to overcharge. They will call you as many times a day they can until you give them a payment over the phone. Even if you tell them you have already sent payment, they do not care, and continue. Send it CMRR and give them the numbers makes no difference.

OK - I'm in the process of doing this with the state laws. I'm trying to do the math and what not, but it'll take awhile before I am certain. Probably tomorrow night (WED)

3. Delete the last two paragraphs. They are unecessary and serve no purpose. They know all of that already.

Will do.

Your goal here is to assure them you will not sit back and be taken advantage of, and, will fight for all you have for resolving this amicably. You can reword some of the ocntent you retain/. Just remember you watn the ball in your court, not theirs. Thus, you need to attack them with their misrepresenting the statutes, as weel as addressing the fees, if found illegal. And, lastly, any other "error" they may have made. Do not be poilte. Be stern, precise, and professional. Thanking them for a quick response is OK, but, they could care less. All they want is for you to pay.

Of course. I understand that completely. And I am not going to back down. That's why I'm going to send the litigious letter. If they would have just told me no PFD, that's different. But lying to me and saying it's FRAUD? Come on.

Call me weak, but part of me does not really want to take this to its eventual conclusion through the court system. That being said - a big part of me DOES. I sometimes crave a fight. I just don't like not knowing for certain that I am going to win.

[Flyingifr]

When you sue a creditor and they settle, they usually wand a Non-Disclosure Agreement inserted into the Settlement. I usually oppose these NDA's - for the same reason Collectors use as opposing PFD's - that by not creating a public record or publicizing the facts behind the suit you are depriving future consumers suing over the same issue the ability to show that the creditor's violation is a corporate policy and not an isolated incident.

BUT... if the PFD is what you want, then by all means sue them, and when they insert the NDA clause into the settlement agreement you simply insert a phrase making the NDA applicable to CRA's as well. With that clause they are prohibited from even responding to a CRA in the face of a FCRA dispute filed with the CRA. With the NDA in hand you can now dispute the TL and if they verify the TL you can sue them again - this time for Breach of Contract.

[Amerikaner83]

After doing more research into WA laws and waht not, I'm feeling more and more like sending out the ITS, and then following through if need be.

I'm going to post an updated copy of the letter I'm going to send soon: Let me know what you all think.

Thanks to all who have replied BTW - I truly appreciate the different perspectives.

[Textoy]

Some information relating to what Third Party Debt Collectors and Debt Purchasers for the Consumer Data Industry Association:

http://cdia.files.cms-plus.com/PDFs/DebtCollectorDebtBuyerGuidance200709.pdf

This is really the source of all this. Both the directions and the justification for the CA train of thought.

[Textoy]

What they (CDIA) deam as valid deletions:

Acceptable reasons for deleting accounts are:

— Accounts which have been canceled and returned to creditor.

— Accounts which have been forwarded or sold to another entity.

— Accounts reported in error.

— Accounts which have been confirmed as fraudulent.

[Amerikaner83]

OK here we go!

Below is the text of RCW 62A, dealing with dishonored checks. Pay special attention to the bolded parts:

RCW 62A.3-515

Checks dishonored by nonacceptance or nonpayment; liability for interest; rate; collection costs and attorneys' fees; satisfaction of claim.

(a) If a check as defined in RCW 62A.3-104 is dishonored by nonacceptance or nonpayment, the payee or person entitled to enforce the check under RCW 62A.3-301 may collect a reasonable handling fee for each instrument. If the check is not paid within fifteen days and after the person entitled to enforce the check or the person's agent sends a notice of dishonor as provided by RCW 62A.3-520 to the drawer at the drawer's last known address, and if the instrument does not provide for the payment of interest or collection costs and attorneys' fees, the drawer of the instrument is liable for payment of interest at the rate of twelve percent per annum from the date of dishonor, and cost of collection not to exceed forty dollars or the face amount of the check, whichever is less, payable to the person entitled to enforce the check. In addition, in the event of court action on the check, the court, after notice and the expiration of the fifteen days, shall award reasonable attorneys' fees, and three times the face amount of the check or three hundred dollars, whichever is less, as part of the damages payable to the person enforcing the check. This section does not apply to an instrument that is dishonored by reason of a justifiable stop payment order.

((1) Subsequent to the commencement of an action on the check (subsection (a)) but prior to the hearing, the defendant may tender to the plaintiff as satisfaction of the claim, an amount of money equal to the face amount of the check, a reasonable handling fee, accrued interest, collection costs equal to the face amount of the check not to exceed forty dollars, and the incurred court costs, service costs, and statutory attorneys' fees.

(2) Nothing in this section precludes the right to commence action in a court under chapter 12.40 RCW for small claims.

OK - Here is the breakdown on what they are wanting:

Check 1 Check 2

$53.00 $32.00 Amount of check

$29.00 $16.00 Interest (but the rate must be shown - it's not!)

$70.00 $57.00 Fees (WAY more than allowed by statute, if i'm reading it right)

In addition, a CA has to disclose the rate of interest on any debt, according to this:

WAC 308-29-070

Disclosure of rate of interest.

Whenever a collection agency is required pursuant to RCW 19.16.250 (8)© to disclose to the debtor that interest charges are being added to the original obligation, the collection agency must also disclose to the debtor the rate of interest. The rate of interest cannot exceed the legal maximum rate established in chapter 19.52 RCW.

Now to tie it up in one nice package. I have the violations here don't I?

[Amerikaner83]

Tex - nice links.

The issue here is not that they won't PFD. The issue is they told me a PFD is FRAUD.

[Textoy]

I understood that, I was trying to bring out the point it's more a business relationship.

I also found the whole instruction book on the web. It is the instruction book that tells them how to fill out the digital data forms sent to the CRAs. This is the only basis they have for saying they are not supposed to. It's a business practice, not a law.

[Amerikaner83]

True. very true.

[Textoy]

I should add, if a given value to be entered in the form is based on a law (FCRA/FDCPA), the law is referenced and examples are given on how to derive the information for that field.

[Amerikaner83]

That makes sense. And Heaven Forbid they do something that makes sense!!!

[Amerikaner83]

OK - So to continue with the matter at hand - below is the RCW for when a CA fails to comply with the requirements of that section (the one I cited earlier):

RCW 62A.3-550

Collection agencies — Consequences for failing to comply with requirements.

No interest, collection costs, and attorneys' fees, except handling fees, are recoverable on any dishonored check under the provisions of RCW 62A.3-530 where a collection agency or its agent, employee, or assign has demanded:

(1) Interest or collection costs in excess of that provided by RCW 62A.3-530; or

(2) Interest or collection costs prior to the expiration of thirty-three days after the serving or mailing of the notice of dishonor, as provided by RCW 62A.3-530 or 62A.3-540; or

(3) Attorneys' fees other than statutory attorneys' fees without having the fees set by the court, or any attorneys' fees prior to thirty-three days after the serving or mailing of the notice of dishonor, as provided by RCW 62A.3-530 or 62A.3-540.

http://apps.leg.wa.gov/RCW/default.aspx?cite=62A.3-550

[2005 c 277 § 5.]

[Amerikaner83]

Allright. I'm pretty sure I have all my ducks in a row here. Here's what I'm planning on sending out Friday or Saturday. What does everyone think of this:

Dear Ms. Representative who replied to me:

I’d like to thank you for your swift reply to my initial settlement offer. Unfortunately, there seem to be some problems that are standing in the way of a mutually beneficial solution, and I’d like to clear them up with you.

You stated that “removing a collection account from your record, would be considered fraud on our part, and we can have no part in that.” That’s not true. The FCRA (Fair Credit Reporting Act) does not require anything to be reported to the credit bureaus; in fact, the FCRA only states that if something is reported, it has to be accurate.

However, lying to me and telling me that it would be fraud, in order to get me to pay you, is downright despicable. There is nothing in any statute of either the State of Washington or Federal law to back up your claim, and I fully believe that the only reason you lied to me and do not want to delete is due to some mindset of wanting to harm the everyday consumer as much as possible.

If there is something in the criminal or civil code of the State of Washington or in the US Statutes that state it is fraud to delete an item from one’s credit report, I demand that you send me proof. I will then be more than happy to tear up the lawsuit I’m drafting against your company. It is against Federal Law (FDCPA) for a collection agency to send a consumer false or misleading information about a debt. Since you stated in writing that an action would be fraud, yet there is nothing in either Washington State or Federal law to back up that claim, you have misrepresented the status of a debt, a violation of the Fair Debt Collection Practices Act.

In addition, in your letter to me you gave me a breakdown of the face value, interest amount, and fees of two checks that I allegedly wrote. You did NOT, however, disclose to me the rate of interest that you are trying to collect, which is a violation of the Washington State consumer Protection Act (Chapter 19.86 RCW). In addition, the amounts of both interest and fees that you are claiming are in excess of those legally allowed, and therefore usurious. According to RCW 19.52.036:

Entering into or transacting a usurious contract is hereby declared to be an unfair act or practice in the conduct of commerce for the purpose of the application of the consumer protection act found in chapter 19.86 RCW.

Additionally, according to RCW 19.16.250:

Prohibited practices.

No licensee or employee of a licensee shall:

…

(18) Collect or attempt to collect in addition to the principal amount of a claim any sum other than allowable interest, collection costs or handling fees expressly authorized by statute, and, in the case of suit, attorney's fees and taxable court costs. A licensee may collect or attempt to collect collection costs and fees, including contingent collection fees, as authorized by a written agreement or contract, between the licensee's client and the debtor, in the collection of a commercial claim. The amount charged to the debtor for collection services shall not exceed thirty-five percent of the commercial claim.

If you don’t already know, I am informing you that according to Washington State law, violating RCW 19.16.250 (which you have done) is considered an “unfair and deceptive trade practice” under the Consumer Protection Act. I’m sure you’re aware that your violations of the Washington State Consumer Protection Act will cost you $2,000.00 each if I follow through with my lawsuit. I’m sure you also know that violating the FDCPA will cost you $1,000.00 per action. I have at minimum a $5,000.00 claim against your company if I decide to file my lawsuit.

I have a claim against you for at least $5,000.00, and you claim that I owe you just over $250.00. I’ll tell you what: I’ll let you settle with me. I’ll drop not only my pending lawsuit against your company, but also my pending complaints with the Washington State Attorney General and Department of Licensing and Regulation if you call my “debt”, in its entirety, null and void and send me a check for $2,000.00 as settlement. In addition, you will permanently remove any and all listings of any debt that references me that you currently control to any and all credit bureaus to which you report and send me a copy of that deletion request. I’m sure you’ll agree it is a very beneficial solution.

If I do not hear back from you by November 23, 2007, I will have no choice but to assume you wish to take this matter to its lengthy and expensive conclusion through the legal system, and I will act accordingly.

Do get back to me; I’d like to have this matter resolved amicably.

Best Regards,

Amerikaner83